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Forget the pre-roll ad. Instead, think of content-sharing partnerships, contextual ads and more experimentation as Google seeks to monetize the eyeballs garnered by its $1.65 billion online video toy YouTube. While calling video advertising something that could be “a significantly large business for us,” Google CEO […]

Forget the pre-roll ad. Instead, think of content-sharing partnerships, contextual ads and more experimentation as Google seeks to monetize the eyeballs garnered by its $1.65 billion online video toy YouTube.


While calling video advertising something that could be “a significantly large business for us,” Google CEO Eric Schmidt hastened to say that “it’s too soon to tell when” during the Q&A part of Wednesday’s earnings call.

Revenue-sharing partnerships, with both traditional and user-generated content producers, seemed far more interesting to Schmidt than pre-roll ads, which he said “have historically not made sense… and there’s some evidence that the traditional pre-rolls people have done did not work.”

(We pause for a cheer from YouTube viewers.)


Instead of being sued for having copyrighted work on YouTube, Schmidt said Google will be encouraging big content houses to submit material to Google, and then partner to monetize the fan base that materializes.

“We’ll ultimately develop partnerships in advertising [with content owners], many unusual,” said Schmidt, who foresees links between Google ad systems and content owners’ systems, in some yet-to-be-determined fashion. Why would the content owners want to partner instead of sue?

Because Google is finding the people who want to watch their content, Schmidt argued. “We’re talking to their fans,” he said.

Some more selected YouTube tidbits from the call:

– Schmidt did not break out YouTube revenue, but did say “early returns” of audience and advertising numbers were “very positive” and that Google was going to get its money’s worth from the deal. “We’re very pleased,” he said.

– Google, Schmidt said, is spending big bucks on video and audio fingerprinting technologies, which are “of significant interest” to Google.

– Chad Hurley has been “pushing very hard” for a revenue-sharing model for people who upload their own videos to YouTube. Expect such a model to emerge this year, Schmidt said.

  1. […] YouTube’s future revenue sharing model, will probably benefit from Google’s own experiments with video advertising. Just last trimester Google started adding pre-roll ads to very targeted video contents found in Google Video. It seems though this was not a great idea. Just recently, Google’s CEO Eric Schmidt said Google would leave this rather uninspired advertising concept for “content-sharing partnerships, contextual ads and more experimentation”. Maybe the fact that 73% of YouTube users say they would visit the site less if it included pre-roll ads before every clip (Via Digg) convinced them this is not the best way to monetize $1.65 billion worth of eyeballs. Here’s hope Mr. Schmidt applies the same logic of less is more to their video strategy. […]

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  2. […] I always think there’ll be a balance in the sense that I don’t think it’s necessarily a threat to traditionally-created content at all. It’s not going to take over the world; it’ll just be another component of people’s media consumption. I’m only sorry that we didn’t get there first online before YouTube, having put it on ABC, knowing how successful it was, that we didn’t think about it as a potential web product.I would just note that most TV and movie execs think of user-gen as the Internet version of “America’s Funniest Home Videos,” and that’s a mistake — it’s much broader and more diverse… and that pigeon-holing seems like the kind of thing that’s destined to lead to some strategic blunders. (Via ReelPop)- Google CEO Eric Schmidt talked a bit yesterday in the company’s earnings call about how YouTube may approach integrating advertising. He also said that discussions continue with media companies about how YouTube can benefit them. (IE, “Please don’t sue us.”) Permalink […]

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  3. […] I always think there’ll be a balance in the sense that I don’t think it’s necessarily a threat to traditionally-created content at all. It’s not going to take over the world; it’ll just be another component of people’s media consumption. I’m only sorry that we didn’t get there first online before YouTube, having put it on ABC, knowing how successful it was, that we didn’t think about it as a potential web product.I would just note that most TV and movie execs think of user-gen as the Internet version of “America’s Funniest Home Videos,” and that’s a mistake — it’s much broader and more diverse… and that pigeon-holing seems like the kind of thing that’s destined to lead to some strategic blunders. (Via ReelPop)- Google CEO Eric Schmidt talked a bit yesterday in the company’s earnings call about how YouTube may approach integrating advertising. He also said that discussions continue with media companies about how YouTube can benefit them. (IE, “Please don’t sue us.”) Permalink […]

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  4. […] I always think there ll be a balance in the sense that I don t think it s necessarily a threat to traditionally-created content at all. It s not going to take over the world; it ll just be another component of people s media consumption. I m only sorry that we didn t get there first online before YouTube, having put it on ABC, knowing how successful it was, that we didn t think about it as a potential web product.I would just note that most TV and movie execs think of user-gen as the Internet version of “America’s Funniest Home Videos,” and that’s a mistake — it’s much broader and more diverse… and that pigeon-holing seems like the kind of thing that’s destined to lead to some strategic blunders. (Via ReelPop)- Google CEO Eric Schmidt talked a bit yesterday in the company’s earnings call about how YouTube may approach integrating advertising. He also said that discussions continue with media companies about how YouTube can benefit them. (IE, “Please don’t sue us.”) […]

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  5. […] waves by saying YouTube hoped to figure out a way to pay its creators. No comments Share/Send Sphere Topic: Media, Random Access Tags: Google, YouTube, ShashiSeth […]

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  6. […] As NewTeeVeesters are well aware, Google CEO Eric Schmidt addressed video advertising at the company’s most recent earnings call, saying the company was looking to get more creative than pre-rolls. The week before that, Chad Hurley made waves by saying YouTube hoped to figure out a way to pay its creators. Topic: Online Video, Money Power Tags: Google, YouTube, Shashi Seth […]

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  9. [...] to push the industry forward with more unobtrusive and engaging formats. Google CEO Eric Schmidt told analysts in early ‘07 that pre-rolls “have historically not made sense,” adding [...]

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